Caple, the alternative SME credit specialist, has completed two eight-year, fully unsecured loans for two UK SMEs in a week.
The firm has supported Grayson Thermal Systems (Grayson), a leading supplier to the automotive market, with a £2m loan. Caple has also facilitated a £3m loan with Spinnaker International Ltd (Spinnaker), a world-leading manufacturer of cash protection boxes and asset tracking technology.
Caple has now completed seven deals worth £16.7m for seven UK SMEs and has more than £80m more in its deal pipeline.
SMEs typically have difficulties raising money without assets to put up as security to banks, making personal guarantees or diluting their ownership by issuing equity.
Caple is the first in the UK to offer unsecured lending based on the future cash flows of the SME. The business requires no collateral or personal guarantees as security.
The company originates loans through a local partner network of accountancy and business advisory firms. Caple loans complement existing bank lending. As a result, Caple supports a blend of financing that delivers long-term growth funding and best suits the SME.
Dominic Buch, co-founder and managing partner of Caple, said: “Successful and growing businesses such as Grayson and Spinnaker need funding that matches their size and ambition. But options for genuinely unsecured debt, requiring no personal guarantees or security, are limited in the UK.
“In an asset-light economy such as the UK, this creates a barrier to growth and may push businesses to issue equity instead of raising debt. Our deals prove the appetite among UK SMEs for unsecured loans alongside bank lending to fund growth. Given the benefits of this blended financing approach, we anticipate doing a lot more.”
Stuart Hateley, managing director of Grayson, said: “We were impressed with Caple. The firm was prepared to back our management team and securing this funding feels like a vote of confidence in what we are doing.”
Tony Westington, managing director of Spinnaker, said: “As a fast-moving technology business, we wanted a loan that would enable us to fund growth without having to give up ownership or control of the business. Caple has enabled us to do this.”
Grayson traditionally designs, manufactures and supports a wide range of engine cooling, heating, ventilation and air conditioning systems. Birmingham-based Grayson is a leading supplier to the bus and coach, specialist and commercial vehicle markets. It exports to more than 50 countries worldwide.
In recent years Grayson has launched a range of e mobility thermal arrangement products. The loan will enable Grayson to accelerate investment in product development in this rapidly changing embryonic market. The firm will also establish a new production facility.
Established in 1985, Spinnaker designs multiple asset protection technology products for the cash-in-transit, banking and retail markets. Cornwall-based Spinnaker exports to more than 40 markets worldwide and has employees in 14 countries.
Spinnaker is expanding rapidly as a result of its focus on product development and it will use the loan to increase its presence in new geographical markets. The firm will also invest in research and development, through its new innovation centre. Spinnaker expects to create a further 15 to 20 jobs as a result of its growth plans.
Colin Burns from corporate finance firm Shaw & Co advised Spinnaker. Caple worked alongside RBS in the Grayson deal and Lloyds Bank in the Spinnaker deal.
The loans Caple facilitates are part of BNP Paribas Asset Management’s SME Alternative Financing direct lending platform, which enables SMEs to access funding from institutional investors. BNP Paribas Asset Management aims to provide €1bn per year in funding to SMEs across Europe and €400m in the UK.